BGH Capital is set to test the strength of debt capital markets, kicking off a $600 million refinancing deal for Village Roadshow, the cinema and theme park operator that the private equity group has owned since late 2020.
Street Talk understands BGH this week formally launched a dual-track process that that is expected to include both banks and unitranche lenders, and would be pitched at around four-times leverage.
Village Roadshow operates cinemas and theme parks including Wet’n’Wild on the Gold Coast.
Village Roadshow has had an eclectic group of lenders, including the Queensland Treasury Corporation, Challenger and Bank of India. It will be interesting to see who returns for a look at the latest deal in addition to new names, particularly in light of its consumer discretionary exposure. Certainly, PAG Capital Asia’s $1.4 billion takeover bid for KKR’s pubs roll-up Australian Venue Co showed both banks and other credit investors are willing to snap out of the COVID-19 hangover for the right deal.
It comes as BGH approaches its third anniversary as Village Roadshow’s owner, a big chunk of which was spent wiling away pandemic lockdowns. The private equity firm plucked the cinema chain off the ASX boards in late 2020 after a year-long battle, where it had to face off against rival bidder Pacific Equity Partners, and stubborn shareholders including Spheria Asset Management and Mittleman Brothers. The winning bid valued Village Roadshow at $586 million in equity value. It had $280 million in net debt.
That was just before the pandemic struck and clubbed discretionary consumer businesses including pubs, cinemas and events. BGH Capital has waited patiently on the sidelines with Village Roadshow, even as comparableRead more on afr.com